Key Takeaways: Texas’ Bitcoin Reserve Program
- Texas has become the first U.S. state to officially purchase Bitcoin as part of its government reserve strategy.
- The initial investment was $10 million, executed at an approximate price of $87,000 per Bitcoin.
- The purchase was made through BlackRock’s iShares Bitcoin Trust (IBIT) as an interim step toward self-custody.
- This move follows legislative actions that established a Strategic Bitcoin Reserve in Texas earlier this year.
- Other governmental entities, like New Hampshire, are also exploring innovative Bitcoin-linked financial instruments.
The state of Texas has marked a new milestone in its digital asset strategy, emerging as the first state in the U.S. to acquire Bitcoin as part of a government reserve program. This move signals a significant shift in state-level financial policy, potentially setting a precedent for how public institutions in the U.S. approach digital assets in the coming years.
State officials have confirmed that the initial acquisition, valued at $10 million and completed at an approximate basis of $87,000 per Bitcoin, represents the first step in a reserve plan that has been under development for over a year. This decision positions Texas as a pioneer in integrating digital assets into its financial framework.
Texas’ Strategic Bitcoin Allocation: BlackRock’s IBIT ETF
According to Lee Bratcher, President of the Texas Blockchain Council, the initial purchase was executed by leveraging BlackRock’s iShares Bitcoin Trust (IBIT). This approach allows the state to gain exposure to Bitcoin while it finalizes the infrastructure for direct self-custody.
Details shared by Bratcher indicate that $5 million of the allocation was deployed at the time of purchase, with the remaining balance aligning with the broader structure of the state’s reserve commitment. This phased approach allows for strategic entry into the Bitcoin market while ensuring careful management of state funds.
TEXAS BOUGHT THE DIP!
Texas becomes the FIRST state to purchase Bitcoin with a $10M investment on Nov. 20th at an approximately $87k basis!
Congratulations to Comptroller @KHancock4TX and the dedicated investments team at Texas Treasury who have been watching this market… pic.twitter.com/wsMqI9HrPD— Lee ₿ratcher (@lee_bratcher) November 25, 2025
Bratcher also stated that Texas intends to self-custody its Bitcoin holdings once the request-for-proposal process concludes. In the interim, using an ETF provides the necessary mechanism to initiate the reserve without causing delays in the legislative timeline. This strategy balances the desire for direct control with the immediate need to establish the reserve.
💡 Insight: Using a Bitcoin ETF as an initial step allows Texas to quickly gain exposure to Bitcoin’s price movements while the state develops the infrastructure for secure, direct custody. This exemplifies a pragmatic approach to integrating digital assets into government finances.
The Genesis of Texas’ Bitcoin Reserve Strategy
The acquisition is a direct result of legislative actions taken earlier this year. In June, the Texas governor signed a bill that officially established a Strategic Bitcoin Reserve. This legislative move followed careful analysis by lawmakers, who considered a proposal during the previous legislative session.
The core of this legislative effort was a bill submitted by State Representative Giovanni Capriglione of Texas. His proposal advocated for considering Bitcoin as a long-term strategic asset for the state. The proposal outlined specific requirements, including cold-storage solutions, minimum holding periods measured in years, and provisions for voluntary contributions from Texas residents.
📍 Important: The Texas bill also allows state agencies to accept cryptocurrency payments and convert them into Bitcoin for deposit into the reserve. This could streamline transactions and increase the state’s Bitcoin holdings over time.
Furthermore, the legislation allows state agencies to receive cryptocurrency payments and convert them directly into Bitcoin for deposit into the reserve. This comprehensive approach demonstrates Texas’ commitment to embracing Bitcoin as a strategic component of its financial future.
This proactive move by Texas occurs against the backdrop of increasing institutional investment in regulated Bitcoin investment vehicles. Notably, the Harvard University Foundation recently increased its stake in IBIT to $442.8 million, marking its largest single reported investment to date. Other institutions, such as Al Warda Investments of Abu Dhabi and Emory University, have also expanded their Bitcoin ETF investments in recent months.
Global Exploration of Bitcoin-Linked Instruments
Texas is not alone in exploring the potential of digital assets. Other governmental entities are also experimenting with innovative Bitcoin-linked financial instruments. For example, New Hampshire recently became the first government worldwide to issue a Bitcoin-backed municipal bond earlier this month.
The Business Finance Authority of New Hampshire has sanctioned a 100 million conduit system that allows private companies to borrow funds using Bitcoin as over-collateralized security held in trust. This innovative approach opens new avenues for capital flow and economic development within the state.
📎 Tip: The New Hampshire model uses Bitcoin as collateral for municipal bonds, requiring borrowers to pledge Bitcoin worth approximately 160% of the loan amount. Automated liquidation safeguards bondholders if the Bitcoin value declines, showcasing a risk-managed approach.
Under this arrangement, borrowers are required to pledge Bitcoin equivalent to approximately 160% of the loan amount. This over-collateralization ensures that bondholders are protected against potential declines in Bitcoin’s value.
The system includes automated liquidation mechanisms to safeguard bondholders if the value of the Bitcoin collateral decreases. Additionally, fees and any appreciation in the posted Bitcoin are allocated to fund the Bitcoin Economic Development Fund in the state of New Hampshire, further promoting economic growth and development.
Frequently Asked Questions About Bitcoin Reserves
What is a Strategic Bitcoin Reserve?
A Strategic Bitcoin Reserve is a government-held fund that allocates a portion of its assets to Bitcoin. The goal is typically to diversify the government’s financial holdings and potentially benefit from Bitcoin’s long-term growth.
Why is Texas investing in Bitcoin?
Texas aims to diversify its financial assets and position itself as a leader in embracing innovative technologies. The state also hopes to attract more businesses and investment to the region by demonstrating its commitment to Bitcoin and the broader cryptocurrency ecosystem.
How does self-custody of Bitcoin work?
Self-custody involves holding the private keys to a Bitcoin wallet, giving the holder complete control over their Bitcoin. This approach eliminates the need for a third-party custodian but also requires robust security measures to protect against loss or theft. Texas plans to implement self-custody after completing a thorough evaluation process.
What other governments are exploring Bitcoin-backed instruments?
New Hampshire has launched a Bitcoin-backed municipal bond program, allowing companies to borrow funds using Bitcoin as collateral. This is one example of how governments are exploring alternative financing strategies involving Bitcoin.
Final Thoughts on Texas’ Bitcoin Initiative
Texas’ move to purchase Bitcoin for its government reserve fund signifies a bold step towards integrating digital assets into the state’s financial strategy. As the first U.S. state to take such action, Texas sets a precedent that could influence other states and governmental entities to explore similar opportunities in the digital asset space.
The combination of legislative support, strategic investment through BlackRock’s IBIT ETF, and plans for future self-custody underscores Texas’ commitment to responsible innovation in finance. As other governments observe and potentially emulate this approach, the integration of Bitcoin into public financial systems could become increasingly common, marking a significant shift in the global financial landscape.
